Michael Kors Gains 8% Following Q4 Print, Guidance, Share Buyback And Acquisition

Shares of Michael Kors Holdings Ltd KORS were trading higher by more than 8 percent Wednesday morning after the company reported its fourth quarter results along with an acquisition announcement and an update to its share buyback program. Michael Kors said that it earned $0.98 per in the fourth quarter on revenue of $1.2 billion. Wall Street analysts were expecting the company to earn $0.97 per share on revenue of $1.2 billion. Gross profit for the quarter rose 10.5 percent from a year ago to $697.2 million and as a percentage of total revenue was 58.2 percent. Retail net sales rose 23.4 percent on a constant currency basis in the quarter to $572.6 million driven by gains in e-commerce sales from its digital flagships and 142 net new store openings. Comparable store sales also rose 0.3 percent in the quarter and rose 1.5 percent on a constant currency basis. Wholesale note sales rose 3.5 percent in the quarter to $590.5 million on a constant currency basis while licensing revenue fell 13.6 percent to $35.6 million. By region, total revenue in the Americas rose 5.1 percent on a constant currency basis to $879.1 million, European revenue rose 18.1 percent on a constant currency basis to $254.1 million while revenue in Asia rose 212.1 percent on a constant currency basis to $65.5 million. The company confirmed it completed its acquisition of Michael Kors (HK) Limited, the exclusive licensee of the company in China and other regions in China for $500 million. John D. Idol, the Company's Chairman and Chief Executive Officer, said, "We are pleased with our financial and operational accomplishments during the fourth quarter and fiscal year 2016, as we delivered continued growth across regions despite the challenging retail environment. In addition, we elevated our product offerings and refreshed our marketing campaigns, both of which were met with positive response from our customers. We also continued to make strategic investments in our business that will pay meaningful dividends for years to come. As these initiatives began to take hold, we ended the year on a strong note, with revenue and earnings per share ahead of our expectations in the fourth quarter, as well as for the full year. Looking ahead, we see multiple growth opportunities, including the expansion of our international markets, the growth of our digital e-commerce flagships, the build-out of our men's business, the launch of Michael Kors ACCESS wearable technology line, and the continued design innovation of our luxury fashion product, which we believe will enable us to deliver sustainable earnings growth and continue to return value to our shareholders." Guidance, Share Buyback Michael Kors also provided guidance for its first quarter 2017 and expects total revenue to be in a range of $940 million to $950 million and earnings per share to be $4.47 to $4.55. Wall Street analysts were already estimating the company to see revenue of $1.03 billion in the quarter and earn $4.42 per share. Finally, Michael Kors announced a new $1 billion share buyback authorization which will replace a prior program that was authorized in October 2015. Joseph B. Parsons, Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer, stated, "The Board's authorization of this new share repurchase program further demonstrates the Company's confidence in our long term business outlook and expected cash flows, and underscores our commitment to enhancing shareholder value."